Thailand approves government-sponsored bank deposit guarantees until mid-2011

In an attempt to shore up bank depositors confidence amid the global financial crisis, which originated in the US and spread to Europe, the Thai cabinet on Tuesday gave the green light to extend full guarantees for bank deposits by another two years until August 10, 2011, Finance Minister Suchart Thada-Thamrongvech said.

Tuesday's cabinet decision is in response to the worldwide credit crunch which has left countries with a shortage of funds and at least some panicked investors, who fear that their money will not be safe in banks.

In August this year, Thailand approved the guaranteeing of all banking deposits for one year, or until August 2009, and a decreasing proportion of deposits for three years thereafter, with a maximum of Bt1 million per customer per account from 2012 onwards.

Mr. Suchart said the extension of full guarantee to bank depositors will help prevent depositors from withdrawing money and making their deposits with banks in the US, Europe and even in some Asian countries such as Singapore, Malaysia and Hong Kong which offer full guarantees to depositors.

In another development, the Thai government will attempt to create jobs as it believes that the US financial problem may have not reached its peak yet, said Mr. Suchart.

He said a workshop will be held Wednesday to discuss small, medium and large-sized funds, as well as the One Tambon (sub-district) One Product (OTOP) programme aimed at assisting the grass-roots local people and the poor in generating extra income despite the economy having turned sluggish. The workshop will be presided over by Prime Minister Somchai Wongsawat.